The Blind Demon is one of the more gruesome and seemingly pointless victims of the Forbidden Ritual. (more about the "Demon Tag" Ritual here.) One of the girls of the Himuro household is chosen to be the Blind Demon ten years before the Strangling Ritual. The date of this ritual seems to be November 26th, and the only requirements seem to be that the girl has "holy power" and is older than 7 years, 9 months, and 25 days.
Right before the Strangling Ritual, the girl is taken to the Blinding Room by the four priests, restrained, and has the Blinding Mask placed on her by the masked Himuro Master. The Blinding Mask is a eyemask with two large stakes driven through the eyeholes, so of course wearing it is bad for your health! Afterwards it seems that the newmade "demon" and the mask are taken down to the Demon Mouth to open the gate to the site of the Strangling Ritual. The mask is used as a key to open the gates, and it looks like the demon is left to wander around on her own, unable to see.
The Blind Demon's ghost still wanders through the mansion, groping her way around in search of the next Blind Demon. Since she can't see, the only way to escape her notice is to stand perfectly still, as Mafuyu advises Miku in a note. When Miku moves, the demon hears her and attacks.
* back*